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When you’re preparing to buy your first home, you’ll encounter lots of jargon - the Loan-to-Value Ratio (LVR) being one of the most important concepts. LVR not only determines how much deposit you need but also plays a key role in your loan’s structure and the costs you’ll need to consider along the way. This guide simplifies everything you need to know about LVR, from how it’s calculated to how it affects your path to homeownership. Along the way, we’ll share practical tips to help you manage your LVR more effectively and highlight how Horizon Bank’s local experts can guide you every step of the way. What is the Loan-to-Value Ratio (LVR)? LVR stands for Loan-to-Value Ratio. It’s a way lenders assess the risk of providing a loan by comparing the amount you want to borrow against the value of the property you wish to purchase. How is LVR Calculated? The formula for calculating LVR is straightforward: LVR = (Loan Amount ÷ Property Value) × 100 For example, if you’re buying a property valued at $500,000 and need to borrow $400,000, the LVR would be calculated as follows: (400,000 ÷ 500,000) × 100 = 80% LVR This means the loan equates to 80% of the property’s value. Why Do Lenders Care About LVR? Lenders use LVR to gauge how much risk a loan carries. Generally, the lower your LVR, the lower the risk for the lender. Borrowing more with a higher LVR increases the lender’s exposure, which may lead to additional costs for the borrower, such as Lenders Mortgage Insurance (LMI). Why is LVR Important for First Home Buyers? For first home buyers, understanding LVR is essential because it directly affects how much deposit you’ll need and influences the overall affordability of your home loan. Impact on Deposit Your LVR determines the minimum deposit you’ll need to secure a home loan. Lenders typically require at least a 20% deposit for an LVR of 80% or lower. If you borrow more than 80% of the property’s value, your LVR rises, and you may be required to pay for LMI, discussed further below. For instance: LVR of 80% means a 20% deposit is required. On a $500,000 property, this would equal $100,000. LVR of 90% would mean a smaller deposit of $50,000 on the same property, but would likely result in LMI and higher monthly repayments. How LVR Affects Borrowing Power LVR can also influence your borrowing capacity and the types of loans you qualify for. A lower LVR generally places you in a stronger financial position, making it more likely you’ll secure favourable terms, such as lower interest rates. A higher LVR may limit your options and add costs. The Relationship Between LVR and Lenders Mortgage Insurance (LMI) LMI is a type of insurance that protects the lender, not you, in case you’re unable to repay your loan. It’s typically required when your LVR exceeds 80%. How LMI Works Higher LVR loans are considered a bigger risk. To mitigate this risk, lenders require borrowers to contribute to LMI. The cost of LMI depends on the loan size and your LVR percentage. The higher your LVR, the more expensive your LMI will be. Example of LMI CostsOn a $500,000 property with an LVR of 90% (loan amount of $450,000), LMI could add thousands to your upfront costs or be capitalised (added to your loan). Tips for Managing Your LVR Effectively Reducing your LVR before applying for a loan can lead to better outcomes, from avoiding LMI to securing competitive interest rates. Here’s how you can do it effectively: 1. Save for a Larger Deposit The simplest way to lower your LVR is to save for a bigger deposit. This not only brings down your borrowing amount but also puts you in a stronger negotiating position for loan terms. 2. Consider the Property Value Carefully Choose a property within your budget to keep LVR manageable. Overextending yourself on a higher-value property could push you into a higher LVR bracket, increasing costs. 3. Leverage First Home Buyer Incentives Take advantage of Australian government grants or programs, such as the First Home Owner Grant, to help boost your deposit and lower your LVR. 4. Seek Guidance from a Local Lender Working with Horizon Bank’s expert team ensures you are informed on your loan LVR, you understand your borrowing capacity, and can navigate the first home loan process with confidence. 5. Build Financial Resilience Maintain a strong financial profile by managing debts and showing consistent savings habits. This can highlight your reliability as a borrower and may help during the approval process. 6. Explore Smart Repayment Options Consider strategies like making fortnightly repayments instead of monthly to pay off your loan faster and gradually reduce your LVR over time. Take Control of Your LVR with Horizon Bank Understanding the Loan-to-Value Ratio (LVR) is crucial for first home buyers. From determining your deposit size to influencing loan approvals and additional costs like LMI, LVR affects nearly every aspect of your home loan experience. At Horizon Bank, we’re here to make the process simpler and more transparent. Our local, customer-first approach ensures you’ll always have access to relevant information from people who understand the Australian market and your unique situation. Horizon Bank has a branch network spanning the NSW South Coast and Illawarra. Horizon Bank branch locations: Albion Park, Bega, Bermagui, Berry, Merimbula, Moruya, Nowra, Thirroul, Ulladulla & Wollongong. Your first home is closer than you think! Speak to one of our local lending experts today to better understand your LVR and discover how Horizon Bank can help you achieve your homeownership goals. Contact us now or visit our First Home Buyer Loan page for more information. The content in this article has been prepared by Horizon Bank for general information only and it is not intended to be professional advice. It does not take into account your objectives, financial situation or needs. You should seek your own legal, accounting, financial or other professional advice where appropriate, and consider the relevant General Terms and Conditions before deciding whether to acquire any products or services offered by Horizon Bank and/or its affiliated partners. We do not recommend any third party products or services referred to in this article unless otherwise stated and we are not liable in relation to them. Any links to third party websites are for your information and we do not endorse any content on those sites. Horizon Credit Union Ltd ABN 66 087 650 173 AFSL and Australian Credit Licence Number 240573 trading as Horizon Bank. 

Buying your first home is one of life’s most exciting milestones, but the road to homeownership often comes with many questions and challenges. How much can you afford? What kind of loan is right for you? And, most importantly, how can you save while making such a significant investment? At Horizon Bank, we understand these concerns, and that's why we’re thrilled to introduce a loan specifically designed for first-time buyers, offering incredible savings to help you take the first step into homeownership. Here’s everything you need to know about our First home buyer loan. What Makes This Loan a Top Money-Saver? When you’re purchasing your first property, every dollar matters. That’s why this loan prioritises affordability with features that deliver real value. Zero Horizon Fees – Yes, Really One of the standout features of this loan is zero Horizon fees. That means no annual or monthly establishment fees or offset account fees. With the cost of buying a property often feeling overwhelming, these cost-saving features provide much-needed relief. Flexible Loan-to-Value Ratio (LVR) Achieving homeownership can feel out of reach when a large deposit is required. With this loan, you can borrow up to 95% of the property’s value, making it possible to get started with a smaller deposit. Keep in mind that anything above 80% will require LMI or guarantor. Principal & Interest Repayments This loan operates on principal and interest repayments, helping you gradually build equity in your property while keeping payments manageable. Why This Loan Stands Out for First-Time Buyers We understand that first-time buyers face unique challenges, so this loan is built to address your needs head-on. ● Affordability: The lifetime discount and zero fees significantly reduce your costs.● Accessibility: A high LVR lowers the deposit barrier so you can enter the property market sooner.● Certainty: With no hidden fees, you can plan your finances confidently. The lifetime 1% discount meant Jessica saved $38,000 in interest over the 30-year term. The zero establishment fees gave her breathing room during the upfront buying costs. Now, Jessica is happily settled in her new home, and her repayments remain manageable thanks to the affordable terms. How to Maximise Your Savings with This Loan Saving with this loan starts with understanding your options and staying financially prepared. Here are some tips to ensure you get the most out of it: Improve Your Credit Score A strong credit score can help you secure even better terms on a loan. Before you apply, pay off smaller debts and maintain a clear credit history. Set a Realistic Budget Ensure you know how much you can afford monthly without stretching yourself too thin. Horizon Bank’s loan calculators can help you estimate your repayments. Explore Government Support First-time buyers in Australia may be eligible for government grants or stamp duty exemptions. Research what’s available in your state to complement your savings with this loan. Ask Questions If you’re unsure about any part of the process, contact Horizon Bank. Our experienced, friendly staff is here to help first-time buyers every step of the way. Your Next Step Towards Homeownership Making the leap to buy your first home can feel daunting, but with Horizon Bank’s First home buyer loan, you can confidently move forward. The savings on interest and fees and the flexibility of a high Loan-to-Value Ratio make it easier than ever to achieve your homeownership dreams. To see how much you could save, try our loan calculators or speak with one of our friendly team members today. At Horizon Bank, our mission is to make your path to owning a home a smooth and rewarding experience. Take the first step towards homeownership. Contact us today or visit one of our branches to explore your options. With Horizon Bank by your side, the future looks brighter. Horizon Bank has a branch network spanning the NSW South Coast and Illawarra. Horizon Bank branch locations: Albion Park, Bega, Bermagui, Berry, Merimbula, Moruya, Nowra, Thirroul, Ulladulla & Wollongong. Frequently Asked Questions Q: What does 95% LVR mean?A 95% Loan-to-Value Ratio means you can borrow up to 95% of the property’s value, leaving you to contribute the remaining 5% as your deposit. Remember, anything above 80% will require LMI or guarantor. Q: Can I use this loan for an investment property?This loan is available for owner-occupied homes or investment property for first-time buyers. Q: Are there any hidden fees?No, this loan comes with zero hidden fees. The focus is on transparency and cost-effectiveness for first-time buyers. The content in this article has been prepared by Horizon Bank for general information only and it is not intended to be professional advice. It does not take into account your objectives, financial situation or needs. You should seek your own legal, accounting, financial or other professional advice where appropriate, and consider the relevant General Terms and Conditions before deciding whether to acquire any products or services offered by Horizon Bank and/or its affiliated partners. We do not recommend any third party products or services referred to in this article unless otherwise stated and we are not liable in relation to them. Any links to third party websites are for your information and we do not endorse any content on those sites. Horizon Credit Union Ltd ABN 66 087 650 173 AFSL and Australian Credit Licence Number 240573 trading as Horizon Bank. 

Becoming a guarantor for a loved one’s home loan can be a meaningful way to help them achieve their dream of home ownership. However, it’s a significant financial responsibility that requires careful consideration. To help you prepare, we’ve put together a guide covering everything you need to know about being a guarantor, from eligibility and responsibilities to financial planning and how to exit the role when the time comes. At Horizon Bank, we’re committed to ensuring that both borrowers and guarantors can make informed decisions, backed by local support and expertise. Who Can Be a Guarantor? A guarantor is someone who agrees to provide security for part or all of a borrower’s home loan, helping the borrower secure a property or access better loan terms. But who qualifies as a guarantor? Eligibility Criteria Guarantors are typically individuals with a stable financial history. This often includes: Having a steady income or sufficient assets. Owning property (outright or with an existing mortgage). Possessing good credit. Lenders will assess your overall financial standing to ensure you can act as a guarantor without putting yourself at financial risk. Common Relationships Most guarantors are family members or close relatives. Parents frequently act as guarantors for their children to help them get onto the property ladder. Occasionally, other trusted individuals, like extended family, can also step in, provided they meet the eligibility criteria. Financial Considerations Before Saying Yes Becoming a guarantor is a big decision, and evaluating your financial situation is essential before agreeing to help. While your intentions may be to support a loved one, it’s important to ensure that the role won’t strain your finances. Assess Your Financial Stability Before agreeing to anything, take an honest look at your financial picture: Do you have existing debts, such as a mortgage, personal loan, or credit card obligations? Can you comfortably handle potential financial pressure if the borrower faces difficulties repaying the loan? How might becoming a guarantor affect your ability to secure credit in the future? Potential Impact on Your Borrowing Power Be prepared for the possibility that being a guarantor could impact your eligibility to take on new loans or financial commitments of your own. Lenders often consider a guarantor’s obligations part of their overall financial responsibilities, even if the loan doesn’t directly affect your finances. Understanding Your Responsibilities as a Guarantor While being a guarantor can be rewarding to help someone you care about, it’s important to understand exactly what you’re agreeing to. Clear expectations upfront can help avoid misunderstandings down the road. Guaranteeing the Loan When you act as a guarantor, you’re offering security to the lender to reduce their risk. This will involve: Using your property as security. Agreeing to guarantee a portion of the loan amount. It’s crucial to understand that you won’t be making regular payments on the borrower’s loan. However, you will need to step in and cover missed payments if the borrower defaults entirely. Managing Risks Before signing any agreements, it’s a good idea to: Seek independent legal or financial advice to fully understand the terms. Discuss repayment plans and contingencies with the borrower to ensure everyone is on the same page. How to Exit Your Role as a Guarantor Many potential guarantors worry about being locked into this role indefinitely. Fortunately, there are clear pathways to exiting the guarantor role once the borrower has reached certain milestones. Conditions for Being Released Most lenders release guarantors from their obligations once the borrower reaches an 80% loan-to-value ratio (LVR). This means the borrower has repaid enough of their loan or the property has gained sufficient value to reduce the lender’s risk. Steps to Exit Once the conditions are met, you can formally apply to be removed as a guarantor. You may need to provide a request to the lender for a release of the guarantee. Lenders usually handle these requests efficiently, but it’s worth staying in touch with the borrower and regularly monitoring their progress. Supporting a Loved One with Confidence Becoming a guarantor is a tangible way to help someone you care about achieve their dream of home ownership. However, entering the arrangement with a full understanding of your responsibilities and the potential financial implications is essential. By planning ahead and seeking experts' support, you can confidently fulfil this role. Talk to Horizon Bank Are you thinking about becoming a guarantor? The team at Horizon Bank is here to help. We’re committed to providing clear, personalised guidance to both borrowers and guarantors, ensuring everyone feels supported and informed throughout the process. Visit us at your nearest local branch at Albion Park, Bega, Bermagui, Berry, Merimbula Moruya, Nowra, Thirroul, Ulladulla or Wollongong or contact us online. Together, we can help you take the next step with confidence. The content in this article has been prepared by Horizon Bank for general information only and it is not intended to be professional advice. It does not take into account your objectives, financial situation or needs. You should seek your own legal, accounting, financial or other professional advice where appropriate, and consider the relevant General Terms and Conditions before deciding whether to acquire any products or services offered by Horizon Bank and/or its affiliated partners. We do not recommend any third party products or services referred to in this article unless otherwise stated and we are not liable in relation to them. Any links to third party websites are for your information and we do not endorse any content on those sites. Horizon Credit Union Ltd ABN 66 087 650 173 AFSL and Australian Credit Licence Number 240573 trading as Horizon Bank. 

If you locked in a fixed-rate loan before interest rates began to rise, you may be worried about the upcoming increase in your mortgage when the term you locked in comes to an end. Here are a few tips on how you can avoid a budget shock when your mortgage reverts to a variable rate. When the interest rates first began to rise from their record-low rates, many homeowners rushed to lock in a fixed-term rate to secure a lower, stable rate. The Reserve Bank of Australia estimates that close to 1 in 4 mortgages were ‘fixed’ at the end of last year, which essentially means the rate was locked in for a period. Usually, banks will offer a fixed-rate period of 1, 2, 3 or 5 years. However, for homeowners who had locked in a fixed rate earlier, such as in 2020 or 2021 when rates were much lower, will likely feel the pinch a lot more when their fixed-term ends than those who opted for a fixed rate in 2022 or 2023. This is because the rates jumped up from around the 2 per cent mark to closer to the 6 per cent mark, and this could potentially add hundreds or thousands of dollars to their repayments in interest, depending on the size of the loan. It's difficult to know what the market is going to look like in the future when opting for a fixed-rate, which is usually done from the perspective of knowing exactly what your repayments will look like for a certain term. Unfortunately, all those fixed terms will eventually expire, and homeowners will return to a variable rate, usually paying more interest. Some may fix their loan again when it comes to this time, but it will likely be at a higher rate than the one they were offered in their previous fixed-mortgage term. If you’re finding yourself in this position, here are a few ways you can make the transition a smoother, and hopefully a less stressful experience. Build a buffer A good idea to test how you will be able to manage the higher repayments is to start putting a bit extra into savings between now and the end of your fixed rate mortgage term. A starting point for this could be to use a mortgage calculator to identify a ballpark of what your new repayments will be when the fixed term ends, and put the difference into a savings account. This will give you an idea of how the household budget will be affected, plus you may even benefit from extra interest in the savings account too. Some fixed-term loans also allow you to make extra repayments, which could help ease the burden when the mortgage increase occurs. At Horizon, we allow up to $30,000 in extra repayments each loan anniversary year, which helps reduce the term of the loan. Horizon also allows you to redraw on those funds free of charge if you require them. Adjust the budget If you work out the new higher repayment and it’s looking tight budget-wise, you may need to look at making some cutbacks. Firstly, look at scaling back discretionary spending where it’s feasible, such as limiting dining out or getting takeaway meals and subscriptions or entertainment activities that are not necessary. Reviewing your budget is always a good idea to ensure you are using or saving your money effectively for your household. Many online tools can help with budgeting and identifying leaks, such as MoneySmart’s budget tool.  Horizon Bank also has some budgeting tools and tips to help out.  Come up with a plan of action It’s important to have an action plan before the fixed-rate term ends so you’re prepared for the change in repayments. A good start is to discuss with your lender everything you need to know before the rate changes; for example what rate you will be offered if you were to fix the mortgage again, or what rate you will be offered if you were to stay on a variable once it reverts. Sometimes there’s a difference between what a new customer and an existing customer would be offered ratewise. If you’ve been with your bank for a while and have always made repayments on time, you may find your bank is willing to negotiate to keep your business. If you’ve paid off more than 30% of the value of your property, you may find you’re eligible for a rate discount. If you want to go into another fixed term loan, it’s also wise to think about that in advance so you can do the sums and get things started promptly.  However, if you decide that you want to refinance to another lender, don’t forget to weigh the costs against the savings. Some lenders will charge exit and application fees, so it’s worth doing your calculations to see if refinancing makes sense for you and your situation. Finally, if you’re having trouble paying your loan and this is causing you anxiety, you can always speak to your lender’s hardship team or a financial counsellor for free via the National Debt Helpline: 1800 007 007.   The end of a fixed-rate mortgage term can be a challenging transition, especially in an environment of rising interest rates. However, you can navigate this phase with minimal financial discomfort with careful planning and strategic decision-making. Building a financial buffer, adjusting your budget, and outlining a clear plan of action are all effective ways to prepare for the increase in repayments. Remember, open communication with your lender is key. Understand the new rate you'll be offered, negotiate if possible, and consider all your options, including another fixed term or refinancing, always weighing the costs against potential savings.   With the right approach and resources, you can manage this transition smoothly and maintain control over your financial future. For more information on home loans and navigating changes in mortgage rates, visit Horizon Bank today. We’ve got the Illawarra and South Coast covered with branches located in Thirroul, Wollongong, Albion Park, Berry, Nowra, Ulladulla, Moruya, Bega, Bermagui and Merimbula.  

Struggling to qualify for a home loan on your own? There may be some other ways to secure your first home! Here are 5 popular strategies that may help you. Property prices are still high and rising in a lot of major cities, so the dream of owning a home can sometimes feel like it’s moving further out of reach for many Australians. However, for savvy buyers, there are still plenty of ways to get your foot in the door. Thinking outside the box… here are some ideas. 1. Buy with a friend or relative Consider buying with a loved one or friend. It’s simple, you can split the cost of the deposit and the loan, which make it easier for you to both qualify for the loan with your bank and meet the loan responsibilities. Before going ahead with this option, it might be worth getting professional advice. It’s best to do so, so that you have an exit plan and preparation for unexpected events such as job loss or getting sick. Check out Horizon’s range of Home Loans or reach out to a lender today to discuss this option more. 2. Get a guarantor loan A guarantor loan means the involvement of a third party – this is usually a parent, extended relative or friend. They put  their own assets against your loan as a guarantee. This will give your lender security in case, for some reason, the loan can’t be repaid. While guarantor loans are good to help those who don’t otherwise qualify for a loan, it comes with risks for the guarantor. If you’re unable to pay the loan back, the lender can ask the guarantor to pay the loan. If they can’t repay the loan, their assets can be repossessed. At Horizon Bank we have a Family Equity Loan, which allows family members to use the available equity in their home or investment property to provide additional security to help cover any borrowing shortfalls between the deposit and loan amount. Reach out to one of our lenders today to learn more, or enquire now online. 3. Consider rentvesting If you’re not able to buy your dream home because you can’t afford it, you could consider investing in a property to rent out at a smaller cost, therefore getting a smaller loan, and renting yourself somewhere else in your preferred area that suits your lifestyle choices. This gives you the opportunity to own a property. Often, owners will use the rental income they earn to pay off their loan, and sometimes even help cover their own rental costs, as well as helping with other property-related expenses. You may want to consult with an accountant to learn about any tax benefits (negative gearing). There is a risk of over-committing with this strategy. The costs may end up outweighing the income your property generates, so it’s very important that you do the math beforehand and work out your budget. You can use our budget calculator to assist in budgeting. If you’re thinking about buying an investment property, check out Horizon’s investment loans. 4. Look farther afield Regional areas are rapidly growing and can often offer similar lifestyle opportunities at a lower cost. Consider a change in scenery if moving is an option for you, and move somewhere where a property market hasn’t caught up to the likes of major cities yet. Regional home buying has been trickier for buyers in the past, with concerns of a move somewhere regional or to the country could hamper their links to city-based employers. This in a post COVID era is an issue that has evaporated, thanks to new technology and more flexible work opportunities. 5. Take advantage of incentive schemes There are a number of national, state and territory based incentive schemes to check out, depending on where you plan to buy and/or live, that can help you get started. These include: First Home Owner Grant – Eligible first-home buyers that are planning to live in their property can get a grant of between $10,000 and $30,000. This scheme is funded by states and territories. Help to Buy – This scheme is set to arrive later in 2024, and is when the federal government offers eligible buyers a contribution of up to 40% of a home’s cost, in exchange for a proportional equity. NOTE: This scheme will only be available to a limited number of prospective homeowners. First Home Super Saver Scheme – This program allows savers to build up their deposit within super while benefiting from tax concessions. Up to $50,000 can be saved up in the borrower’s super account and they can withdraw it once they are ready to apply for their loan. Other state and territory based schemes – Different jurisdictions have slightly different approaches in helping first-time buyers, so it’s worth checking your state and territory websites to see what they can offer.   The content in this article has been prepared by Horizon Bank for general information only and it is not intended to be professional advice. It does not take into account your objectives, financial situation or needs. You should seek your own legal, accounting, financial or other professional advice where appropriate, and consider the relevant General Terms and Conditions before deciding whether to acquire any products or services offered by Horizon Bank and/or its affiliated partners. We do not recommend any third party products or services referred to in this article unless otherwise stated and we are not liable in relation to them. Any links to third party websites are for your information and we do not endorse any content on those sites. Horizon Credit Union Ltd ABN 66 087 650 173 AFSL and Australian Credit Licence Number 240573 trading as Horizon Bank.   

4 TOP TIPS TO PAYING YOUR HOME LOAN OFF FASTER (without increasing your payments) Pay your home loan off faster without increasing your payments? That doesn’t sound right! Well of course paying more off your loan will reduce it but short of asking for a raise or getting a second job, most of us are working off what we receive each payday. These paying off your home loan faster tips are all about working smarter, not harder.Stick with me and I’ll give you 4 top tips on easy and fast ways to pay off your home loan quicker.You may have heard that the secret to success is to find those little hacks, those incremental improvements that snowball to achieve tremendous results. Well, this is all about finding what’s available to you and taking full advantage to benefit you financially. It’s not as hard as you’d think. 1. CHOOSE YOUR REPAYMENT FREQUENCY If you don’t specify how often you want to make loan repayments, your bank or lender is likely to make it monthly. If you’re getting paid weekly or fortnightly, change payments to that. KEY INFO: This is really important and simple information … your loan interest is being calculated on the daily balance of your loan, so the less your loan balance is … the less interest you’ll attract and you’ll eventually pay off your loan quicker. This tip and the rest below are all incremental ways that takes into consideration that Key Info and helps you reduce the length of time of your home loan and therefore pay your debt off quicker. 2. MORTGAGE OFFSET ACCOUNT Ask your lender for a mortgage offset account. This account is key to successfully paying off your home loan quicker. What’s a mortgage offset account you may be asking? Basically, a mortgage offset account is a savings account that earns no interest, the balance however offsets your loan balance. Put simply … if you had $500,000 left to pay off your home loan and you had $30,000 in your mortgage offset account, you would only pay interest on $470,000 rather than $500,000! How good is that? As an example, if you had a 6.00%p.a. home loan, that would be a saving of $1,500 in interest over a year, compared to if those funds were in a savings account earning 1%p.a. The less interest you attract means you pay your loan off quicker!You haven’t increased payments AND you still have access to your savings in the mortgage offset account should you need it.Ideally, any spare cash you have would be deposited and kept in the offset account. This leads me to tip #3 and how you can live day to day while keeping as much cash as possible in your mortgage offset account.[Learn more about Horizon Bank’s Mortgage Offset Account here.] 3. GET A CREDIT CARD Are the warning bells going off? I know this sounds counterintuitive but the idea here is to find a low rate no annual fee card that you can use daily. What this does is delay payment of your everyday expenses. Remember, your home loan interest is normally calculated daily and charged monthly. It stands to reason that you should keep has much money as possible in your mortgage offset account to offset your daily loan balance. You can achieve this by delaying the payment of your everyday expenses as long as possible. The other REALLY important part of this tip is to pay the required balance of your credit card to avoid any credit card interest. Generally, cards with reward points attract a high annual fee and interest rate. If you are wanting to minimise the cost, a no or low annual fee credit card is your go to. If your bank or lender is doing right by you, you can arrange to have the balance of your credit card paid out of your mortgage offset account automatically each month to avoid any interest.[Learn more about Horizon Bank’s low rate Visa credit card here.] 4. HOLD OFF PAYING BILLS You may be alarmed once again at the idea of delaying payment of bills but once again, this is your opportunity to keep as much in your mortgage offset account for as long as possible. Remember, your loan interest is being calculated on its daily balance. The longer you can keep your money offsetting the loan the quicker you can pay off your home loan.Your online banking should allow you to set up automatic payment of your bills from your mortgage offset account on the last day payment is required. Set and forget.[Learn more about Horizon Bank’s banking access facilities here.] SIT BACK AND RELAXIf you take a little time to put all these tips into place, you can sit back and relax knowing you’re working the system to benefit you financially. You’ll achieve the ultimate goal of paying off your home loan faster. _________________________________________This blog has been brought to you by Horizon Bank.Horizon Bank has a branch network spanning the NSW South Coast & Illawarra, Branch locations: Albion Park, Bega, Bermagui, Berry, Merimbula, Moruya, Nowra, Thirroul & Ulladulla & Wollongong.Horizonbank.com.au    

What is an offset account? A home loan is a major financial commitment. This is why it’s a good idea to use products that will help you manage this commitment. Put simply, an offset account is a savings account that ‘offsets’ your loan balance and can help you pay it down quicker. Here's an example: Sarah and Tom have a $400,000 Home Sweet Home loan. They also have $40,000 in a Home Sweet Home 100% offset account linked to their home loan. Instead of paying interest on the full $400,000, their offset account balance means they only pay interest on $360,000 ($400,000 – $40,000). If their home loan interest rate is 6.00%p.a Claire and Sam would pay $2,158 interest in a month instead of $2,398 – saving them $240 just because they have an offset account. A bonus feature is that they can access their money at any time if needed. It is important to note that an offset account, while it is a savings account, does not attract any interest. Why get an offset account? A mortgage offset account with a substantial balance will reduce the amount of interest you pay on your home loan, which will reduce the amount you pay over the life of the loan. An offset account can be used just like a savings account where you can make regular deposits. The bigger the balance, the more it’s helping you to pay down your home loan. If you come into an inheritance, earn winnings or some other form of income, holding it in your offset account will ensure you’re maximizing its effectiveness in regards to your payments. You’ll be able to manage your offset account from within Online Banking and our mobile banking app. When you log in, you’ll be able to see the balance and make deposits, transfers and withdrawals. There are no withdrawal limits from an offset account and transfers are instant. What should you look for in a mortgage offset account? Not all offset accounts are the same. Some offset 100% of your loan, while some offset a smaller percentage so make sure you check the details of the account. Be on the lookout for: A 100 percent (full) offset account, rather than a partial offset Easy access to your offset funds No balance limit or penalties for withdrawal Any monthly or annual fees for having an offset account Some financial institutions may offer multiple offset accounts linked to one loan, which can help if you're saving for a few big-ticket items like another property, a holiday, a wedding or a new car. Look out for any fees associated with multiple offset accounts. How much money do you need in an offset account to make it pay? Having a substantial balance in your offset is going to maximise its effectiveness in reducing your interest costs. While you can use it as a savings account and withdraw money from it, any money regularly withdrawn from the account may not be beneficial. If the money is leaving the account as quickly as it goes in, the benefit is going to be minimal. Unless you have money sitting in this account long-term, you may only see little or no benefit. You may also want to consider the interest you would earn in a regular savings account that has an attractive interest rate. If using an offset account, will the reduced interest on your home loan be greater than the interest you would earn, if your savings in the offset account were in a savings account? Is it better to have money in offset or redraw? Offset and redraw facilities offer the same savings concept but are different in how they work. They both can help you pay off your loan earlier by reducing the amount of interest you pay on your home loan. Both are generally available on most standard variable rate loans. An offset account works like a savings account. You can have your pay deposited there, link a debit card to it, and make regular deposits and withdrawals. Alternatively, a redraw is a loan feature. You can only use your redraw if you have made additional repayments to draw from. Making extra repayments into your loan can increase the equity in your home, reduce your loan repayments and will help keep extra savings out of sight, out of mind. Many loans now have a redraw feature that allows you to make additional repayments to your loan. Some lenders may have a redraw minimum or a fee for using the redraw feature. You may be able to use an offset account and the redraw feature on your loan, it doesn’t have to be one or the other. Ultimately, which one you prefer to use comes down to how you manage money. If you need discipline and don’t want to access the funds as you would from any other account, a loan redraw facility may be the best option.   At Horizon Bank, we’re here to help you with your personal banking needs. Get in touch with our friendly team today and let’s chat about your home loan and investment loan options. Speak to a real local person with branches conveniently located in Albion Park, Bega, Berry, Bermagui, Thirroul, Wollongong, Ulladulla, Moruya, Merimbula and Nowra.      The content in this article has been prepared by Horizon Bank for general information only and it is not intended to be professional advice. It does not take into account your objectives, financial situation or needs. You should seek your own legal, accounting, financial or other professional advice where appropriate, and consider the relevant General Terms and Conditions before deciding whether to acquire any products or services offered by Horizon Bank and/or its affiliated partners. We do not recommend any third party products or services referred to in this article unless otherwise stated and we are not liable in relation to them. Any links to third party websites are for your information and we do not endorse any content on those sites. Horizon Credit Union Ltd ABN 66 087 650 173 AFSL and Australian Credit Licence Number 240573 trading as Horizon Bank.

The process of buying a home can be stressful, and an auction process can seem quite daunting… but it doesn’t have to be! Auctions are often a common rite of passage to owning your first home, going into it prepared with forethought and strategy can help maximise your chances of success (without having to pay too much). If this is your first home buying experience, we’ve got 10 tips for you to help you on your journey to acing your first auction, not missing out or paying too much and getting that dream home! 1. Do your homework. When preparing for a real estate auction, research is key! Here are a few things you can do: Take a look online at recently sold listings in the area so you can better understand the prices at which similar properties have sold for.  Walk around the neighbourhood and if you have the opportunity, speak to some of the neighbours about the area.  Attend other open homes for nearby properties. These sorts of activities can help you better understand the home's location and market value and assist in deciding a suitable bidding range for the auction.  2. Obtain a professional building report.  It's important to fully understand the condition of the property and what you’re bidding on, so getting a thorough onsite inspection of the property as well as obtaining a professional building report is a must. If the building report doesn’t come back as favourable, you’ll be able to walk away before the bidding begins. Alternatively, you could use this information to set a lower bidding limit. 3. Set a budget. Establish a clear budget before stepping into the auction. Remember, you need to consider more than just the bidding price. There are additional expenses such as stamp duty, conveyancing costs, furnishings and any renovations that need to be taken into account. It’s very easy to get over-excited at an auction, so it’s key that you set a maximum bid amount that aligns with your financial capabilities … and stick to it. 4. Apply for financing pre-approval and pull your deposit together. Pre-approval for a home loan is a type of preliminary approval from a lender. Before you start bidding at an auction, you need to approach your lender to get pre-approved for a loan so that you can be confident in knowing you have finance to pay for your new home should you become the successful bidder. This will show you how much you can comfortably afford based on your income and expenditure.  You will also need to ensure you have your deposit saved and ready to transfer if you are the winning bidder at the auction. Get fast pre-approval with Horizon’s quick loan application turnarounds! Enquire with your local lender now. 5. Understand the auction process. Auctions are typically carried out by a real-estate agent, who will act as the auctioneer, and are subject to strict rules. Before an auction, the seller of the property will nominate a reserve price, this is not usually made public. During the auction the hopeful buyers will compete to put in the highest bid for the property. Auctions are fast paced so it’s important to make sure you’re keeping track of the competing bids being placed and stick to your budget. If the reserve price is met and bidding continues, the home will be sold at the end of the auction however, if the bidders don’t reach the reserve price the auctioneer might ‘pass in’ the property, which means it is not sold. Another important piece of information you need to consider before diving into an auction is that if you are the successful bidder, there is no cooling off period or time to change your mind about the sale. 6. Familiarise yourself with the auction rules. As mentioned above, some auctions will have specific rules or procedures. Things such as requirements for registration, bidding increments and payment methods. Make sure you get a copy of the auctions terms & conditions to review, that way you can be prepared to follow the rules. 7. Thoroughly examine the sale contract. In order to protect yourself against any potential risks that come with buying the property, obtain a copy of the sale contract and show it to your solicitor or conveyancer for review prior to the auction. They can review the contract and explain any risks that may come with purchasing the property. 8. Attend other auctions as an observer. If you want to try to understand the dynamics and pace of an auction process, it’s a good idea to attend some auctions just to observe. This will help you get a feel for the auction process before you go in as a bidder. 9. Bid strategically. There are a few tailored bidding tactics that you can use to maximise your chances of success at an auction, such as establishing dominance by bidding early, bidding incrementally so you can scope out the competition or waiting until the last minute to jump in with a decisive bid. You may need to adapt your strategy based on the behaviour of the other bidders or the dynamics of an auction on the day. 10. Enjoy the experience. Although it’s important to be prepared, strategic and level-headed at an auction, you should also try to enjoy the experience! Auctions are exhilarating and whether you win or lose, each time you participate in an auction you will gain valuable insights and lessons for the next time. Every bid you make brings you closer to owning your own home or investment property! Celebrate your successes and learn from your mistakes. We know you’ll get there!   Although it can seem daunting participating in your first auction, it can also be an exhilarating and rewarding experience as long as you go in with the right mindset and preparation. It’s important to remember that success at an auction isn’t just about winning, it’s about securing the right home at the right price and time for you. By following the tips above and doing all the right preparation, setting your budget, staying calm under pressure, and observing auction protocol, you’ll be on the path to acing your first auction! These strategies will enhance your chances of success. As you step into the world of auctions, remember that financial readiness is critical. Horizon Bank ensures you have all the financial support and advice you need to make confident bids. Whether you're looking into securing a loan for that must-have item or seeking advice on managing your finances post-auction, our team at Horizon Bank is ready to assist you. Don't let financial uncertainties hold you back from acing your first auction. Visit us online or drop by your nearest branch to discover how we can help you make your auction experience seamless and financially sound. Let Horizon Bank be your partner in navigating the exciting world of auctions. Start your journey with us today! Horizon Bank has a branch network spanning the NSW South Coast and Illawarra. Horizon Bank branch locations: Albion Park, Bega, Bermagui, Berry, Merimbula, Moruya, Nowra, Thirroul, Ulladulla & Wollongong.

Fixed vs Variable: Pros and cons of fixing your interest rate Are you in the market for a loan but aren’t sure whether to take out a fixed of variable rate? Choosing between fixed and variable interest rates can be complex, especially for first-time borrowers. This blog aims to simplify this decision-making process by providing in-depth insights into both options, which will help you understand how these interest rates work and which best fits your financial situation. Understanding Interest Rates Interest rates play a crucial role in determining the overall cost of your loan. Banks will normally offer a fixed rate of a period of 1, 2 , 3 or 5 years. So the interest rate remains unchanged throughout whichever period you choose. This offers you stability and predictability in your repayments. Your repayment stays the same regardless of market changes. At the end of the fixed period, the rate normally reverts to a variable rate or you can choose to re-fix.Conversely, variable interest rates can fluctuate in response to market conditions. This could mean that your repayments decrease when market rates fall, but they also could increase if market rates rise. The Pros and Cons of Fixed Interest Rates Choosing a fixed-interest rate loan means that you’ll know exactly what your repayments will be for the fixed period you choose; this is normally less than or equal to 5 years. This can make it easier for you to budget and plan for your future. However, a major drawback of a fixed rate is their lack of flexibility. This means if the market rates fall, you will still be required to pay the higher rate. Additionally, fixed-interest rate loans may have restrictions on whether you are able to make extra repayments or pay off the loan early. It is likely to have a fee to break the fixed rate contract. The Pros and Cons of Variable Interest Rates A variable interest rate offers more flexibility than their fixed counterparts. If market rates decrease, so will your repayments, potentially saving you money. Many variable-rate loans will also allow extra repayments, allowing you to pay off your loan faster. On the downside, variable-rate loans are unpredictable. If the market rates rise, so will your repayments, potentially stretching your budget. Fixed Interest Rates with Horizon Bank At Horizon Bank, we offer competitive fixed-rate loans. By choosing a fixed-rate loan with us, you can effectively manage your finances by knowing exactly what your weekly, fortnightly or monthly repayments will be. Our team of experts are always available to guide you through the process and present the loan options that best suits your needs. Horizon allows up to $30,000 in extra repayments each loan anniversary year, which helps reduce the term of the loan. For extra repayments made on a fixed-interest rate loan, Horizon allows you to redraw on those funds if you require to do so down the track free of charge. Variable Interest Rates with Horizon Bank At Horizon Bank, our variable-rate loans are designed to provide you with flexibility and potential savings, which is ideal for both experienced buyers and first-home buyers. Benefit from a variable interest rate and take advantage of flexible weekly, fortnightly or monthly repayment options – whichever suits you best – as well as the allowance of extra repayments without penalty. Making Your Decision The choice between fixed and variable rates depends heavily on the current Australian economic climate. For example, a variable rate might save you money in a falling market, but in a rising market a fixed rate could offer you more stability. Your personal finance goals should be the primary driver behind your decision of whether you value stability or flexibility. We understand that choosing between a fixed and variable interest rate is a significant decision that can greatly impact your financial future. By considering the pros and cons of each option you can make an informed decision that aligns with your financial goals and circumstances. Contact us to explore your loan options, you can have a chat with one of our experts today. We’ve got the Illawarra and South Coast covered with branches located in Thirroul, Wollongong, Albion Park, Berry, Nowra, Ulladulla, Moruya, Bega, Bermagui and Merimbula. Regardless of where you live, reach out to us by filling in an online loan enquiry form and we’ll assist you over the phone and email.

Benefits of Loan Pre-Approval   Making big purchases, like a new car or home is exciting! It also requires thinking about your situation and choices carefully. You may also need to act quickly when necessary, which can be tricky. A fast loan pre-approval is a helpful tool that can make this process easier. It increases your chances of buying what you want before someone else does and takes some of the stress out of these monumental decisions!   What's Conditional Pre-Approval? Conditional pre-approval is like a signal from a lender. It tells you that you can ask for a loan up to a certain amount. But you don't have to take the loan, and the lender doesn't have to give you that much money. However, it tells a seller that you're serious about buying and that you're sure you can pay for what you want. To figure out how much you can borrow, the lender looks at your financial situation and the price range of whatever it is you want to buy.   Why Consider Pre-Approved Loans? Conditional pre-approval not only shows sellers that you're serious about buying, but it also helps you with your finances and budgeting once you find what you want. If you're just starting to think about buying a home for example, getting a swift pre-approval helps you look for homes that you can more likely afford. It gives you an idea of how much money the lender might lend you. If something changes while you're looking – like your money situation – you can update your pre-approval.   How to access Fast Loan Pre-Approval from Horizon Bank? You can apply for a loan online, pop into your local Horizon branch, or give us a call and talk to a lender. Here's what you should know: The price range of what you want to buy If you've saved money for part of the purchase How much you earn How much you spend on living expenses   How Long Does Loan Pre-Approval Last? When pre-approved for a loan, the pre-approval generally will last for two months. Need longer? No stress! We just need to revisit your documents to give you more time. Speak to your lender to learn more about the duration of your individual pre-approval.   Time to Buy, What Happens Next? Once you find what you want to buy you just provide the details to the lender and seek formal approval. This significantly reduces turnaround time in order for you to make your purchase quickly.   With 10 branches located in Thirroul, Wollongong, Albion Park, Berry, Nowra, Ulladulla, Moruya, Bega, Bermagui and Merimbula, we have got the NSW South Coast covered. Not a local? Not a worry! Reach out to us by filling in an online application form and we’ll assist you over the phone and email.